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CEO: Mutual Dollar Bank still raising capital with $6.2 billion in assets

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By Thomas Olson
Friday, Dec. 16, 2011

In the banking world, Dollar Bank is a standout.

Dollar, which held its annual meeting on Thursday, is unusual because it's a mutual organization owned by its depositors, not stockholders.

The bank is also large for a mutual with 62 branches and about $6.2 billion in assets, making it the Pittsburgh region's third-largest retail bank.

The past three years have been "the worst economic environment since the Great Depression," CEO Robert Oeler told the 10 people attending yesterday's meeting at the bank's Downtown headquarters. All but one of the attendees were bank employees.

Dollar Bank was not forced to take government aid to ensure its survival during the recession like larger competitors.

"We've still been able to raise capital" during the tough times, Oeler said.

Dollar's core capital level is 10.6 percent of assets, well above regulators' 6 percent minimum. A bank's capital is a cushion of money held above what is owed to depositors.

For the year ended Nov. 30, Dollar's net income was "slightly above" the $40.1 million recorded last fiscal year, based on unaudited figures, Oeler said. Loans increased 8.8 percent.

"Our ongoing strength and size allows us to reinvest in our communities," he said, noting the bank recently renewed its sponsorship of the Dollar Bank Three Rivers Arts Festival.

"We never jumped into (subprime) lending," said Oeler, who became CEO in 2007 and has been with Dollar for 39 years. "So we never had to fall back and regroup" like other banks burned by bad home loans.

Dollar has 35 branches in the seven-county Pittsburgh region and a total of 62 branches in Ohio and Pennsylvania. The bank has opened five branches in this region in the past two years, the latest in July 2010 on Fifth Avenue in Oakland. It plans to add a branch in the Cleveland suburb of Beachwood in January.

"They are in a class by themselves. Not many mutuals are Dollar's size," said Arnold Danielson, chairman of Danielson Associates, a bank consultant in Bethesda, Md.

Massachusetts and Maryland have the largest concentrations of mutual banks and savings and loans, he said.

Western Pennsylvania is home to 59 retail banks and savings and loans. Eleven of them are mutual organizations, making this region somewhat unusual, Danielson said. None of the others in the region has more than a couple of branches.

Mutuals "are a dying breed," he said.

Many have converted to stock institutions over the years, especially from about 2000 to 2006. Many mutuals, including some in this region, converted to stock ownership because "going public" during a healthy stock market generated lots of capital, Danielson said.

The only depositor at yesterday's meeting was Malcolm Nimick, 48, of Edgeworth. A lifelong depositor, he said he would vote "no" if Dollar ever decided to convert to stock ownership.

"The value of a mutual savings bank is immeasurable and an asset to this city," said Nimick, whose father was Dollar's chairman from the 1950s until the 1980s. "It doesn't have to live by quarterly numbers and bend to the whims of Wall Street analysts, so it can make good long-term decisions."

Dollar has no plans to convert to stock ownership, said bank spokesman Jim Carroll Jr.

Separately, Oeler said Dollar would have its iconic, life-sized lions sculpted in brownstone back on their perches in February. The lion sculptures, each weighing about 13,000 pounds, were removed in September 2009 to be restored.

The pair will be placed back at the Fourth Avenue branch Downtown over the weekend of Feb. 18 and 19 -- but inside the lobby, not outside astride the steps, where they stood for the first 138 years.

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